Property prices decline in 60 of China’s top 100 cities

Property prices fell in 60 of China's 100 top cities in December, the fourth month in a row that home prices have declined in the country.

Worried over the sharp escalation in property prices in recent years, the Chinese government has been trying to tame the real estate market in recent months, discouraging consumers from buying homes.

The action of the government and authorities in many cities has resulted in bringing prices under control in cities including Beijing, Shanghai, Shenzhen and Guangzhou. While many local authorities have banned the acquisition of a second home, some cities have even blocked the sale of properties above a specified price.

For the Chinese government, tackling property prices is a dicey issue. When housing costs soar, there are fears of a public backlash, leading to political protests. But a sharp decline in property prices could also send the economy into a tailspin. The housing and related industries account for a quarter of China's gross domestic product.

The financial crisis in Europe is jeopardising China's growth prospects, as it threatens its exports. The government, which had taken stern measures to curb inflation, is now keen on backing growth.

The central bank, which for the first time in more than three years cut banks' reserve requirement by half a percentage point last month, is now backing policies that would accelerate growth, instead of combatting inflation.